Beazley draws the line

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His back bench and the electorate are unsure, but Kim
Beazley is moving to rebuild Labor's credibility.

What goes around comes around, so there was more than a little
poetic justice for Kim Beazley on Thursday when a newspaper
reported that unnamed Labor MPs were aghast at their leader's
decision to vote against tax cuts contained in the budget.

The destabilisation process had begun, with the anonymous quotes
detailing bewilderment and dismay at Beazley's judgement during the
one week of each year when even the most aggressively indifferent
voter is paying attention to what's going on in Canberra. It was
difficult not to feel a Proustian rush, as if we were all back in
2003, when Beazley's supporters were doing exactly the same thing
to Simon Crean, predicting disaster at every turn and subjecting
him to a political death of a thousand cuts.

One difference was that, of course, this time the backgrounding
was aimed at hurting Beazley, not helping him. The other was that
the process has become turbo-charged. A Labor MP told me on
Thursday afternoon that he had already fielded three phone calls
from members of the press gallery asking when the challenge against
Beazley would be on.

That's pretty good going, given that the declaration that Labor
would oppose the Government's tax cuts was pretty much the first
thing Beazley had done since he took on the leadership almost four
months ago. One announcement and he's dead meat!

And it wasn't as though the decision to vote down the tax cuts
was Labor's last word. On Thursday night in his formal reply to the
budget, Beazley outlined an alternative tax plan that would award
middle and lower-income earners bigger cuts, while shaving benefits
for those on very high incomes.

The crucial element was always going to be what Beazley put
forward in place of what the Government is offering because what
Labor is looking to establish is credibility on the economics, not
on the politics.

Not only is Beazley not assured of becoming prime minister, he is
not assured of leading Labor to the election."

True, its stance will in all probability delay the introduction
of the Government's cuts until some time in August - that's when
the Coalition-controlled Senate will first meet. But 2½
years from now, when voters are choosing who to support, will they
be thinking about six weeks of missed tax cuts - and for a lot of
workers, that amounts to $36 in total - back in 2005?

A few will, but consider what would be said about Beazley and
the ALP if it decided to denounce the Government's tax cuts but
then pass them in the Senate. Peter Costello would mock Beazley as
a fatuous windbag who said one thing but did another, a bloke who
did not have the courage of his convictions.

That was exactly the theme that ran through Beazley's previous
stint as leader. If you want to chart his decline as a serious
leadership figure during that period, you need only look at the
examples of him railing against a policy or a bill and then backing
it in the Parliament: the private health insurance rebate, the
restructuring of schools spending to favour private schools, the
Tampa legislation.

He would be an utter fool to do it again, even if it does set
the hares running within the caucus and the media. Even if it does
initiate the process that could cruel his reheated leadership.

Not only is Beazley not assured of becoming prime minister, he
is not assured of leading Labor to the next election. But if he
does not make it all the way to 2007, it will not be because his
judgement deserted him on the the 2005-06 budget tax changes.

Labor has an incredibly long way to go if it wants to deal
itself back into consideration as a viable, desirable, trustworthy
manager of the national economy. This is a long-term project,
almost certainly on a longer time frame than the next election.

Surely the lesson of the 2004 election, even allowing for the
electorate's judgement of the peculiarities of Mark Latham's
leadership, is that the electoral contest in Australia is, for the
moment and probably for the foreseeable future, less than
competitive.

The run of economic growth and the massive tax receipts that
consequently flow into the Treasury coffers have stalled the
contest between the Coalition parties and the ALP. While the good
times continue to roll, there will be no reason for voters in
marginal seats to switch to the Opposition.

Labor, if it is to survive as a mainstream, mass-based party
with a chance of again winning office nationally, has to restore
its credentials on economic management. This will take years and
the need to keep the focus on economic credibility rather than
short-term political positioning - and there are a good number of
caucus members who remain obsessed with the latter - could well
burn up Beazley's leadership.

It shouldn't be forgotten that up to 50 per cent of the caucus
earlier this year wanted either Kevin Rudd or Julia Gillard ahead
of Beazley to replace Latham. The idea that everyone in the caucus
was comfortable with Beazley's return was always a fantasy.

This week's budget exposed the monumental political task facing
the ALP. The amount of money the Government has to play around with
is phenomenal. In terms of the conventional exercise of policy,
there is almost nothing it cannot do. Put another way, it has more
money than it knows what to do with.

As long as that situation prevails, Labor will not win an
election. The ALP's only chance is to build voter respect by
offering a comprehensive alternative economic plan, something built
on genuine principle and not flaky prejudices and populism, and
remaining faithful to it not just over a week or a month but year
after year.

It then has to await a downturn or a serious slowing in the rate
of economic growth. Only then, with the economic cycle coming into
synch with the political cycle would it have a shot at regaining
government.

That could be a long way away. The worst thing Beazley or any
Labor leader who succeeds him could do is to listen to media advice
on matters such as the tax cuts contained in the budget.

As one well-heeled colleague observed cheerfully in Canberra on
budget day, the Government was offering a "commentator's tax cut".
Few of the commentators and editorialists who have hailed the tax
cuts and condemned Labor for its "futile" gesture of blocking the
cuts in the Senate would not find themselves standing to gain
big-time from the Government's proposals. They certainly will have
more than $6 extra a week to play around with once the budget is
passed.